A failure of American democracy

NEW YORK The real cause of spreading corporate malfeasance in America is a lack of faith in democratic institutions. Business malfeasance is the consequence neither of systemic capitalist contradictions nor of private sin, which are endemic to capitalism and indeed to humanity. It arises from a failure of the instruments of democracy, which have been weakened by three decades of market fundamentalism, privatization ideology and resentment of government.

Capitalism is not too strong; democracy is too weak. Americans have not grown too hubristic as producers and consumers; we have grown too timid as citizens, acquiescing in deregulation and privatization (airlines, accounting firms, banks, media conglomerates, you name it) and a growing tyranny of money over politics.

The corrosive effects of this trend are visible not only on Wall Street. The Bush administration, which favors energy production over energy conservation, has engineered a reversal of a generation of progress on environmentalism.

These policies can be traced directly to that proud disdain for the public realm that is common to all market fundamentalists. Such attitudes represent a penchant for a go-it-alone economics that undermines the social contract and turns corporate sins into virtues of the bottom line.

Even in foreign policy, where unilateralism and the repudiation of partnerships might suggest a muscular governmental policy, there is a tendency to treat the international sector as a Hobbesian "state of nature," anarchic and disorderly, where "force and fraud are cardinal virtues." The United States fails to see that the international treaties it will not sign, the criminal court it will not acknowledge and the United Nations system it does not adequately support are efforts, however compromised, at developing a new global contract to contain the chaos. The American belittlement of these efforts betrays a strategy that enhances global anarchy in the name of preserving national sovereignty. Thus the new global disorder is as incapable of constraining global crime as the deregulated domestic market is incapable of containing corporate crime.

Market fundamentalism, which defined the era of Ronald Reagan and Margaret Thatcher, encourages a myth of omnipotent markets. But this is as foolish and wrongheaded as the myth of omnipotent states, which reigned from the New Deal to the Great Society. It tricks people into believing that their own common power represents some bureaucrat's hegemony over them, and that buying power is the same as voting power. But consumers are not citizens, and markets cannot exercise democratic sovereignty. The ascendant market ideology claims to free us, but it actually robs us of the civic freedom by which we control the social consequences of private choices.

The truth is that runaway capitalists, environmental know-nothings, irresponsible accountants, amoral drug runners and anti-modern terrorists all flourish because we have diminished the power of the public sphere. By privatizing government functions and refusing to help create democratic institutions of global governance, America has relinquished its authority to control these forces.

Within the United States, we foolishly think we possess a private liberty that allows us to work and prosper individually, not together or in conformity with a social contract. In the international realm, we seem to believe that our claim to national sovereignty allows us to operate unilaterally, not together or in conformity with a global contract.

On Sept. 11 no one looked to Bill Gates or Michael Eisner for national leadership. On that day Americans remembered the true meaning of words like citizen and public servant and relied upon firefighters, mayors, Congress and the president. Why then today do we expect corporate executives or "market professionals" to cure the disorders of anarchic market capitalism - which, as Theodore Roosevelt understood, responds only to democratic oversight? And how do we expect a go-it-alone superpower to depose terrorists who exploit the global interdependence that America is reluctant to recognize? These ends are public. To secure them is the common task of every citizen.